Why iPhone and Android phone prices will get even higher

Paying a thousand bucks for a phone is no longer laughable. In fact, it’s probably the new normal.

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When Apple broke the $1,000 barrier for its iPhone X last September, critics scoffed at its exorbitant price. They doubted people would reach so deeply into their wallets for a phone that outpriced two other perfectly good iPhones, the iPhone 8 and iPhone 8 Plus. The critics were wrong. Apple CEO Tim Cook said in July that the iPhone X had outsold every other Apple device in each week since it went on sale Nov. 3, 2017.

With strong iPhone X sales, Apple proved that mainstream buyers are willing to pay almost as much, if not more, for their cell phones as they would for a powerful laptop. And with rumors of an even pricier 2018 iPhone X Plus-style phone coming down the pike this September, Apple’s moves to usher in the era of the $1,000 phone may just be getting underway.

In just two years, the cost of Samsung’s Galaxy phone for US buyers has spiked 15.1 percent from the Galaxy S7 in 2016 to this year’s Galaxy S9, while the Huawei P series has climbed 33 percent since 2016 — and that doesn’t even account for the existence of a “Pro” model.

But the largest leap of all belongs to the OnePlus phones, whose price tag since 2016 has soared 32.6 percent in the US and 42.6 percent in the UK. (See your region’s chart below.)

The trend of increasingly costly handsets in the top tier underscores the cell phone’s importance as an everything-device for communication, work, photography and entertainment. And as processing power, camera technology, battery life and internet data speeds improve generation after generation, the value people attach to a phone is sure to swell.

“Consumers are prepared to pay a premium for a mobile phone because it is arguably the most important product in their lives,” said Ben Wood, the chief research analyst at CCS Insight.

Rising prices aren’t unusual on their own. Faster, better components like processors and cameras cost more to make. The financial load of researching and developing new materials also gets folded into the final product. And inflation affects the cost of goods outside of tech, too.

But R&D spending and inflation don’t tell the entire story your phone’s creeping expense. By increasing the prices of their phones with each iteration, Apple, Samsung and other leaders in the industry are creating an ultra high-end segment that can make each sale more profitable — that’s important as people start holding on to their phones longer, for three years or more.

Yep, your phone costs more every year

With few exceptions, phone prices from top brands are on the rise……Read more>>